WT/GC/W/807/Rev.2  
 
6 December 2022  
(22-9075) Page: 1/7 
General Council  Original: English  
 
TRADE RELATED CHALLENGES OF THE LEAST DEVELOPED COUNTRIES AND WAY 
FORWARD: PROPOSAL FOR WTO SMOOTH TRANSITION MEASURES IN  
FAVOUR  OF COUNTRIES GRADUATED FROM THE LDC CATEGORY  
COMMUNICATION FROM DJIBOUTI ON BEHALF OF THE LDC GROUP  
Revision  
The following communication, dated 5 December 2022, is being circulated at the request of the 
delegation of Djibouti on behalf of the LDC Group.  
 
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BACKGROUND  
1.  At the 2021 triennial review of the UN Committee on Development Policy (CDP), 16 LDCs officially 
met the two graduation criteria set by the United Nations to leave the least developed country (LDC) 
category, and another 10 met one graduation criterion. Out of these 26 countries, 19 are WTO 
Members and five are in the process of accession.  
2.  While leaving the LDC category represents a major achievement, countries still face significant 
trade and development challenges after graduation and risk falling back into the category. Leaving 
the LDC category also implies losing access to  a wide range of International Support Measures (ISM) 
including trade -related ones, which have contributed to LDCs socio -economic development. As 
documented by the work of UNCTAD, this is particularly challenging because countries meeting the 
graduation cr iteria often do so without having significantly developed their productive capacities or 
made sufficient progress in the structural transformation of their economies.1 The abrupt removal 
of ISM can therefore result in large negative impacts for countries after graduation from the LDC 
category. This is particularly true in the current context where LDCs have been hit hard by trade 
downturns triggered by the COVID -19 pand emic. The persistent food and energy crisis resulting 
from the global geopolitical situation have also reversed much of the development progress achieved 
so far by LDCs, further strengthening the rationale for effective support post -graduation.  
3.  In recogni tion of this need, the United Nations has adopted the principle of "smooth transition" 
whereby specific support measures for LDCs should be phased out progressively over a period of 
time after graduation to avoid disrupting development progress. Consistent  with Paragraph 16 of 
General Assembly resolution A/RES/67/221 adopted on 21 December 2012 WTO Members should 
extend to graduated countries existing special flexibilities available to LDCs. In addition, the UNCTAD 
Fifteen Outcome Document, the Bridgetown C ovenant (TD/541/Add.2, paragraph 48), calls for 
mitigating and support measures to ensure a smooth transition for LDCs after graduation. More 
recently, the WTO MC12 outcome document (WT/MIN(22)/24; WT/L/1135 paragraph 5) 
acknowledges the particular challen ges that graduation presents for LDCs including the loss of trade -
related ISM, and recognizes the role that certain measures in the WTO can play in facilitating a 
smooth and sustainable transition after graduation.  
 
1 See "Strategy for graduation with momentum: Bridging pre -graduation and post -graduation 
development processes in the least developed countries", Policy Brief No. 99, UNCTAD, April 2022, available at  
https://unctad.org/system/files/official -document/presspb2022d7_en.pdf . WT/GC/W/807/Rev.2  
 
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  SMOOTH TRANSITION MEASURES IN SUPPORT OF  COUNTRIES LEAVING THE LDC 
CATEGORY  
4.  Against this background, the present revised submission proposes the contours of a 
comprehensive and effective set of smooth transition measures in the WTO to support Members 
when they leave the LDC category. In doing so  it builds on previous General Council submissions 
circulated in November 2020 (WT/GC/W/807) and in October 2021 (WT/GC/W/829) as well as the 
LDC ministerial declarations on MC12 of October 2021 (WT/MIN(21)/2).  
5.  A first element of such measures should cons ist of extending and gradually phasing out unilateral 
trade preferences granted to LDCs over a period of six years (which corresponds to two triennial 
reviews by the UN CDP) or a period determined by the preference providing Member, after the entry 
into fo rce of a decision of the UN General Assembly to exclude a country from the LDC category. 
Annex  1 to this submission provides a draft General Council decision to that effect.  
6.  A second element, as part of the WTO smooth transition measures, the LDC group fu rther 
proposes the following principles in favour  of Members after graduation from the LDC category:  
i. Exempting from action under the WTO dispute settlement mechanism, for an 
appropriate period of time, the LDC -specific special measures listed in the Append ix 1 
of Annex 2 to this submission , when these are applied by or in favour  of a Member 
after graduation from the LDC category . 
ii. Extending for an appropriate period of time, LDC -specific special flexibilities 
incorporated in future WTO Agreement, Understandi ng, Ministerial, General Council or 
other relevant Decisions in accordance with modalities to be defined in such 
instruments.  
iii. Providing continued access to all LDC -specific technical assistance and capacity 
building programs and facilities provided under t he WTO system for an appropriate 
period of time.  
7.  The LDC group proposes to instruct the Sub -Committee for Least -Developed Countries to develop 
recommendations for support measures - based on the core set of principles listed in paragraph 6 - 
in favour  of countries when they leave the LDC category, and to complete this work and report to 
the General Council no later than 30 June 2023 for appropriate action.  Annex 2 to this submission 
provides a draft General Council deci sion to that effect.   
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  WT/GC/W/807/Rev.2  
 
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  ANNEX 1  
PROPOSAL FOR A GENERAL COUNCIL DECISION ON DUTY -FREE, QUOTA FREE (DFQF) EXTENSION 
IN FAVOUR OF COUNTRIES GRADUATED FROM THE LDC CATEGORY  
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Draft General Council Decision  
 
The General Council,  
Having regard to the provision for consensus decision -making in paragraph 1 of Article IX of the 
Marrakesh Agreement Establishing the World Trade Organization (WTO);  
Noting  proposals submitted  by the LDC Group at the General Council (WT/GC/W/807, 
WT/GC/W/8 29, and WT/GC/W/807/Rev.2);  
Recalling the Programme of Action for Least Developed Countries (LDCs) for the Decade 2011 –2020, 
adopted at the Fourth United Nations Conference on the Least Developed Countries, held in Istanbul, 
Turkey in 2011, in which Member  States committed to assisting LDCs with an overarching goal of 
enabling half of the LDCs to meet the criteria for graduation by 2020;  
Further recalling  relevant UN General Assembly Resolutions, and paragraph 5 of the WTO MC12 
Outcome Document adopted by Ministers on 17 June 2022 (WT/MIN(22)/24, WT/L/1135);  
Therefore, recognizing  the need to establish effective procedures supporting the smooth transition 
of LDCs towards their new status after graduation, through extending LDC -specific trade -related 
support measures over a reasonable period of time;  
Decides  as follows:  
Unilateral trade preferences  
1. We encourage Members granting unilateral trade preferences to least developed countries, 
through their preferential programmes that determine eligibili ty based on the listing by the UN 
of a country as a Least Developed Country, to have procedures in place to extend, or gradually 
phase out, such programmes over a period of six years, or a period determined by the preference 
providing Member, after the ent ry into force of a decision of the UN General Assembly to exclude 
a country from the LDC category.  
 
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  WT/GC/W/807/Rev.2  
 
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  ANNEX 2  
PROPOSAL FOR A GENERAL COUNCIL DECISION ON SMOOTH TRANSITION SUPPORT MEASURES 
IN FAVOUR OF COUNTRIES GRADUATED FROM THE LDC CATEG ORY 
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Draft General Council Decision  
 
 
The General Council,  
 
Having regard to the provision for consensus decision -making in paragraph 1 of Article IX of the 
Marrakesh Agreement Establishing the World Trade Organization (WTO);  
Noting  proposals submitted  by the LDC Group at the General Council (WT/GC/W/807, 
WT/GC/W/829, and WT/GC/W/807/Rev.2);  
Recalling the Programme of Action for Least Developed Countries (LDCs) for the Decade 2011 –2020, 
adopted at the Fourth United Nations Conference  on the Least Developed Countries, held in Istanbul, 
Turkey in 2011, in which Member States committed to assisting LDCs with an overarching goal of 
enabling half of the LDCs to meet the criteria for graduation by 2020;  
Further recalling  relevant UN General  Assembly Resolutions and paragraph 5 of the WTO MC12 
Outcome Document adopted by Ministers on 17 June 2022 (WT/MIN(22)/24, WT/L/1135);  
Therefore, recognizing  the need to establish effective procedures supporting the smooth transition 
of LDCs towards thei r new status after graduation, through extending LDC -specific trade -related 
support measures over a reasonable period of time;  
Decides as follows:  
 
Support measures in favour  of WTO Members after leaving the LDC Category  
1. We instruct the Sub -Committee for Least -Developed Countries to develop recommendations for 
support measures in favour  of a Member after the entry into force of a decision from the UN 
General Assembly to exclude that Member from the LDC category and report to the General 
Council no later th an 30 June 2023.  
2. The support measures referred to in paragraph 1 shall include the following elements:  
i. Provisions for continued access to LDC -specific technical assistance and capacity 
building programmes and facilities provided under the WTO system for an  appropriate 
period of time,  
ii. A proposed list of LDC -specific support measures based on the provisions of WTO 
Agreements and Decisions and modalities contained in Appendix I to this decision, and  
iii. Any other relevant measures, as appropriate.  
3. Measures identified in paragraph 2(ii) shall be exempt from actions under the WTO dispute 
settlement mechanism for a period of time to be agreed by Members, when applied by, or in 
favour of, a Member  after the entry into force of a decision from the UN Gen eral Assembly to 
exclude that Member from the LDC category.  
  WT/GC/W/807/Rev.2  
 
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  APPENDIX 1  
LIST OF SPECIAL LDC PROVISIONS IN WTO AGREEMENTS AND DECISIONS TO BE INCLUDED FOR 
SMOOTH TRANSITION  
A. LDC-SPECIFIC PROVISIONS IN WTO AGREEMENTS  
 
Provision  Description  Treatment under WTO smooth 
transition  
Agreement on Subsidies and Countervailing Measures (SCM)  
Article 27.2(a)  LDCs exemption from prohibition 
of export subsidies.  As requested in the LDC Group's 
submission WT/GC/W/742 – 
G/C/W/752  
Agreement on Trade -related Aspects of Intellectual Property Rights (TRIPS)  
Article 66.1  
 
Extension of the 
Transition Period for 
LDC Members 
(IP/C/88)  
 
 Implementation of the TRIPS other 
than Articles 3, 4 and 5, extended 
until 1 July 2034, or until the date 
when they cease to be an LDC, 
whichever date is earlier.  Transition period shall be extended for 
a period of [X years] after graduation 
from the LDC category or until the end 
of the final extension period granted to 
LDCs, whichever date is earlier.  
Article 66. 2 Developed countries to provide 
Transfer of Technologies (ToT) 
incentives in favour  of LDCs.  Provision of ToT incentives shall be 
extended for a period of [X years] after 
graduation from the LDC category.  
Trade Facilitation Agreement  
Article 17  Early warning Mechanism – 
Extension of implementation dates 
for provisions in categories B and 
C Flexibilities provided for LDCs shall be 
extended for a period of [X years] after 
graduation from the LDC category.  
Article 19.2  Shifting between  
categories B and C  Flexibilities provided for LDCs shall be 
extended for a period of [X years] after 
graduation from the LDC category.  
Article 20.2 – 3 Grace Period for Application of the 
Understanding on Rules and 
Procedures Governing t he 
Settlement of Disputes  Flexibilities provided for LDCs shall be 
extended for a period of [X years] aft er 
graduation from the LDC category.  
Dispute Settlement Understanding  
Article 24  Special Procedures Involving 
Least -Developed Country Members  Special procedure provided for LDCs 
shall continue to apply for a period of  
[X years]  after graduation from the 
LDC category.  
Agreement on Fisheries Subsidies  
 
Article 8, footnote 13  Notification of additional 
information under Articles 8.1 
every four years  Notification schedule shall continue to 
apply for a period of [X years] after 
graduation from the LDC category.  
  WT/GC/W/807/Rev.2  
 
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  B. SPECIFIC DECISIONS TAKEN IN FAVOUR OF LDCs  
 
LDC-Specific Decision  Description  Treatment under  WTO 
smooth transition  
LDC waivers including transition periods and trade preferences  
Enabling Clause L/4903 of 
28 November 1979, para. 2(d), 
6 and 8  Allows WTO Members to grant LDC 
specific treatment  The right to grant specific 
treatment under the enabling 
clause shall be extended to 
countries after graduation from 
the LDC category.  
Preferential Tariff Treatment for 
Least -Developed Countries – 
Decision on Waiver (WT/L/304, 
WT/L/759, and G/C/W/764)  Allows developing countries to 
grant trade preferences to LDCs 
until 30 June 2029  
 Provisions of the waiver shall 
continue to apply for a period 
of [X years] after graduation 
from the LDC category or until 
the end of the waiver validity, 
whichever date is earlier.  
Decision in Favour of LDC. 
Annex F Hong Kong Ministerial 
Decision, Duty -Free and Quota -
Free Market Access for LDCs, 
Bali and Nairobi Ministerial 
Decisions on Rules of Origin for 
LDCs (WT/L/919, 
WT/MIN(15)/47 and 
WT/L/917)  Provision of DFQF market access 
for LDCs and more flexible rules of 
origin  
 DFQF market access and more 
flexible rules of origin shall 
continue to apply for a period 
of [X years] after graduation 
from the LDC category.  
LDC modalities & services 
waiver (TN/S/13, WT/L/847, 
WT/MIN(15)/48 - WT/L/982, 
WT/MIN(13)/43 - WT/L/918)  The decision extends the LDC 
Services Waiver until 2030  Provisions of the waiver shall 
continue to apply for a period 
of [X years] after graduation 
from the LDC category or until 
the end of the waiver validity, 
whichever date is earlier.  
Cotton Ministerial Decision 
WT/MIN( 15)/46 - WT/L/981  DFQF for cotton and related 
products produced and exported by 
LDCs DFQF for cotton and related 
products shall be extended for 
a period of [X years] after 
graduation from the LDC 
category.  
LDC obligations under 
Article  70.8 and Article 70 .9 of 
the TRIPS Agreement with 
respect to Pharmaceutical 
Products (WT/L/971) of 
2 December 2015  Exempts LDC members from the 
application of mailbox 
requirements and exclusive 
marketing rights until 1 January 
2033 or until such a date on which 
they cease to  be a LDC member, 
whichever is earlier  Exemption shall be extended 
for a period of [X years] after 
graduation from the LDC 
category or until the end of the 
final extension period granted 
to LDCs, whichever date is 
earlier.  
Extension of the LDC Transition 
Period under Article 66.1 of the 
TRIPS Agreement  
for certain obligations with 
respect to Pharmaceutical 
Products (IP/C/73)  Exempts LDC members from the 
implementation or application of 
Sections 5 and 7 of Part II of the 
TRIPS Agreement or enfor cements 
of rights provided under these 
sections, with respect to 
Pharmaceutical Products, extended 
until 1 January 2033, or until the 
date when they cease to be an 
LDC, whichever date is earlier  Transition period shall be 
extended for a period of [X 
years]  after graduation from 
the LDC category or until the 
end of the final extension 
period granted to LDCs, 
whichever date is earlier.  WT/GC/W/807/Rev.2  
 
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  LDC-Specific Decision  Description  Treatment under  WTO 
smooth transition  
Export Competition Ministerial 
Decision WT/MIN/(15)/45 - 
WT/L/980  Flexibilities under Article 9.4 of the 
Agreement on Agriculture dealing 
with export subsidies extended 
until 2030  Flexibilities shall be extended 
for a period of [X years] after 
graduation from the LDC 
category or until the final 
extension period granted to 
LDCs, whichever date is earlier.  
Notification obligations  
Domestic support notification 
(G/AG/2)  LDCs to notify every two years  Notification schedule shall 
continue to apply for a period 
of [X years] after graduation 
from the LDC category.  
 
 
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